Memorandum
|
To: |
Information
and Referral Advocates |
|
From: |
Daniel Brzovic |
|
Re: |
Medicare
prescription drug benefit (Medicare Part D) |
|
Date: |
November 11, 2006 |
|
|
|
This memo gives an overview
of the most basic provisions of the Medicare Part D program. Many of the items described in this memo are
described in more detail in other memos or other materials. The purpose of this memo is to give an
overview of the Part D program while focusing on how it applies to people with
disabilities, and particularly people who have both Medicare and Medi-Cal.
Following a brief
introduction to the program, this memo describes what people have to consider
in choosing a Medicare Part D prescription drug plan.
NOTE:
In no event should anyone at PAI advise an individual to choose a particular
drug plan, or choose a drug plan for them.
PAI staff should advise individuals of their options so that individuals
can choose the plan that is best for them.
There have been some changes
in the Medicare Part D program for 2007.
The following are some of the changes.
Open
Enrollment
Beneficiaries
who do not receive Medi-Cal can change plans between November 15 and December
1. The change will be effective on
January 1. Medi-Cal beneficiaries with
zero share of cost can change at any time effective the following month. Medi-Cal beneficiaries with a share of cost
who meet their share of cost at least four times per year can also change at
any time effective the following month.
Copayment
Amounts
Most
copayments have been increased based on increases in the cost of medical care
or the consumer price index.
|
Copayment |
2007 |
2006 |
|
Full benefit dual eligibles
(Zero share of cost Medi-Cal) Generic/Preferred
multi-source drug Brand
name drug |
$1.00 $3.10 |
$1.00 $3.00 |
|
All other beneficiaries who
have a copayment Generic/Preferred
multi-source drug Brand
name drug |
$2.15 $5.35 |
$2.00 $5.00 |
Deductible/Coinsurance
Amounts
Deductible
and coinsurance amounts have also been increased for the standard benefit and
the low-income subsidy based in increases in the cost of medical care.
|
|
2007 |
2006 |
|
Deductible (Standard
Benefit) |
$265 |
$250 |
|
Initial Coverage Limit
(Standard Benefit) |
$2,400 |
$2,250 |
|
Out-of-Pocket (OOP)
Threshold (Standard Benefit) (This is the “donut hole.”) |
$3,850 |
$3,600 |
|
Total Covered Part D
Spending at OOP Threshold (Standard Benefit) (Catastrophic benefit
begins after total drug spending reaches this amount) |
$5,451.25 |
$5,100 |
|
Deductible (Low-Income
Subsidy, Group 4) |
$53 |
$50 |
California
Benchmark Plans
These
are the plans that Low Income Subsidy (LIS) beneficiaries (including Medi-Cal
beneficiaries) are eligible for without payment of a premium.
New
benchmark plans will be offered by CIGNA Health Care (CIGNATURE Rx Value Plan)
and RxAmerica (Advantage Star Plan).
WellCare
is will be offering a new plan called the “Classic” plan. WellCare will continue to offer the
“Signature” plan.
Unicare
Medicare Rx Rewards plan beneficiaries will be shifted to the Medicare Rx
Rewards Value plan. Health Net Orange
Option (02) and Option (08) plan beneficiaries will be shifted to the Health
Net Orange Option 1 plan.
United
Healthcare has taken over PacifiCare.
PacifiCare Saver Plan beneficiaries will be shifted to United
Healthcare’s AARP Medicare Rx Plan – Saver.
United Health Rx and AARP Medicare Rx Plan beneficiaries will also be
shifted to AARP Medicare Rx Plan – Saver.
Beneficiaries with formulary exceptions for 2006 will have those
exceptions grandfathered in for 2007.
Medicare Part D is the new
Medicare prescription drug plan. It
provides additional outpatient prescription drug coverage for Medicare
beneficiaries. The program began
In the past, Medicare
generally provided drug coverage for people in the hospital, or in a skilled
nursing facility following a hospital stay.
This coverage is provided as part of the hospital or skilled nursing
facility benefit under Medicare Part A.
Medicare also provides coverage for medications that generally have to
be administered in a doctor’s office.
This coverage is provided as part of the Supplementary Medical Insurance
benefit under Medicare Part B. Those
parts of the Medicare program will not change, and Medicare Parts A and B will
continue to provide the drug coverage that Medicare has always provided just as
it did before.
People with Medicare HMOs
(Medicare Advantage plans) under Medicare Part C, such as Kaiser Senior
Advantage, Secure Horizons or Health Net, can receive their Part D drug
coverage through their HMO. There may be
an additional premium for the drug coverage for people in Medicare HMOs who do
not receive Medi-Cal or the Low Income Subsidy.
For Medi-Cal beneficiaries
who also receive Medicare (dual eligibles), most Medi-Cal drug coverage was
transferred entirely from Medi-Cal to Medicare Part D beginning
The Low Income Subsidy (LIS)
or “Extra Help” program pays premiums and most other drug costs for Medi-Cal
beneficiaries and others who meet the program’s income and resource guidelines.
It will be easier to
understand the Medicare Part D program if you have some basic information about
the Medicare program in general. There
are two useful publications that give a good basic overview of Medicare. The first publication is: “Understanding Changes in Prescription Drug
Coverage for People with Disabilities,” published by the Health Policy
Institute at
The prescription drug plan is
available to any Medicare beneficiary.
This includes people who are enrolled in both Medicare and Medi-Cal
(dual eligible beneficiaries).
NOTE:
Drug coverage for beneficiaries with Medi-Cal only (no Medicare) will
continue to be paid for by Medi-Cal. In
addition, some drugs that are excluded entirely from Medicare Part D coverage
will continue to be covered by Medi-Cal, even for Medi-Cal beneficiaries who
also have Medicare. (This is explained
in more detail later in this memo.)
The Medicare Part D
prescription drug benefit is provided through private health insurance
companies or private health maintenance organizations (HMOs). Most Medicare beneficiaries, including
Medicare beneficiaries who also have Medi-Cal, will have to choose a Medicare
Part D prescription drug plan in order to get the prescription drug
coverage. However, if you have
“creditable” health insurance coverage through an employee, retiree or
government health plan you do not need to sign up for Part D to continue your
drug coverage. “Creditable” coverage is
drug coverage that is provided through Medicare Part D or is as good as
coverage that is provided through Medicare Part D.
The prescription drug plans
vary from company. Many companies offer
more than one plan. There may be
differences in premiums, cost-sharing requirements, drug formularies, drug
utilization controls, and participating pharmacies. Plans can offer enhanced coverage upon
payment of a higher premium. People will
need to consider all of these things in order to choose the plan that is best
for them.
A majority of the members of
Congress that enacted this program seem to believe that drug prices are best
regulated through market forces rather than through direct government
intervention. Therefore (so the theory
goes) if the drug benefit is offered through competing private plans, the plans
will hold drug prices down.
If you have concerns about
the way the Medicare Part D program is set up (including the transfer of most
Medi-Cal drug coverage to Medicare Part D) you may want to contact your
representatives in Congress and let them know your concerns.
Medi-Cal beneficiaries. If you have
Medi-Cal as well as Medicare, you will have to enroll in a Medicare Part D
plan. Only a few categories of drugs are
covered under Medi-Cal for dual eligible beneficiaries. (This is explained in more detail later in
this memo.) If you have Medi-Cal and
became eligible for Medicare, most of your Medi-Cal drug coverage will end when
you become eligible for Medicare Part D.
Your Medi-Cal drug coverage will end when you become eligible for
Medicare Part D whether or not you are enrolled in a Medicare Part D drug
plan. Therefore, if you do not enroll in
a Medicare Part D drug plan you will have no coverage for most drugs.
If you have Medi-Cal and you
also have Medicare and you do not choose a plan yourself, you will be auto
enrolled in a Medicare Part D drug plan.
If you were not auto enrolled, check with your pharmacist. If you do not like the plan that you were
auto enrolled in, you can change to another plan.
Private and government
health plan beneficiaries. If you have health coverage in addition to
Medicare (such as coverage through employment, a retirement plan, a
union-sponsored plan, or a state or federal government plan) you may not need
to enroll in Medicare Part D. It depends
on whether or not your health plan provides “creditable” (Medicare Part D or as
good) drug coverage. Check with your
health plan. If you have Part D or other
creditable coverage through your health plan, ask for a notice of that in
writing.
If you have federal health
care coverage from the VA, TRICARE, or the Federal Employee Health Benefits
Program (FEHBP), you do not need to enroll in Medicare Part D. If you have a Medigap policy, it is probably
best for you to enroll in a Medicare Part D plan.
NOTE:
If you have health coverage that already provides Medicare Part D drug
coverage (including a retiree health plan that receives a federal subsidy to
provide drug coverage) you should be careful about enrolling in a Medicare Part
D plan. This is because you could
potentially be disenrolled from your entire health plan if you sign up for a
Medicare Part D prescription drug plan.
Check with your health plan.
Medicare HMO (Medicare
Advantage) beneficiaries. If you are part of a Medicare HMO (e.g.
Secure Horizons, Kaiser Senior Advantage, Health Net) you can be automatically
enrolled in your HMO’s Medicare Part D plan.
Check with your plan. You have a
right to disenroll from the Medicare Part D coverage.
Medicare-only
beneficiaries. If you do not have Medi-Cal, and you do not
have other health coverage, but you do have Medicare, enrollment in a Medicare
Part D prescription drug plan is completely voluntary. However, there is a penalty for late
enrollment. (See the following section.)
Medi-Cal beneficiaries. If you have
Medi-Cal as well as Medicare, you will have to enroll in a Medicare Part D plan
as soon as you become eligible for Medicare Part D. This is because most Medi-Cal drug coverage
for Medicare beneficiaries stops when the beneficiary becomes eligible for
Medicare Part D.
Health plan beneficiaries
with “creditable” coverage. If you have a health plan in addition to
Medicare (such as coverage through employment, a retirement plan, a
union-sponsored plan, or a state or federal government plan) you do not have to
enroll in a Medicare Part D plan as long as the drug coverage under your health
plan is “creditable coverage.”
“Creditable coverage” means that the drug coverage under your health
plan is either Medicare Part D coverage, or coverage at least as good as
Medicare Part D drug coverage. Your
employer or health plan will notify you if you have creditable coverage. If you do not get written notice of
creditable coverage, ask your employer or health plan for it. Keep the notice for your records.
All other Medicare
beneficiaries. If you currently have Medicare, but not
Medi-Cal or a health plan with creditable drug coverage, you can enroll in a
Medicare Part D plan during the same period in which you can enroll for
Medicare Part B. After that, you can
enroll between November 15 and December 31 for Part D coverage effective the
following January 1.
If you miss the initial
enrollment date, then your monthly premium for Part D coverage will go up 1%
for each month that you delay enrollment.
This is 1% of the national average premium. For people who receive Medi-Cal or the Low
Income Subsidy, 80% of the penalty is paid for by the Low Income Subsidy.
For people who do not receive
Medi-Cal or the Low Income Subsidy the 1% penalty is applied for months
beginning June, 2006. This is because
May 2006 was the last month in which people who were Medicare beneficiaries at
that time could enroll for that year.
For people who receive Medi-Cal or the Low Income Subsidy the penalty is
applied for months beginning January 2007.
The purpose of this premium
penalty is to encourage individuals to enroll in a Part D plan even if they do
not have high drug costs yet. So if you
do not have high drug costs, you may still want to consider whether enrolling
in a Medicare Part D plan is best for you because you may have higher drug
costs in the future, and the Part D plans will cost you more if you wait.
Consider the following: If an individual was a Medicare beneficiary in
2005 and did not enroll in a Medicare Part D drug plan by May 2006, that
individual would not be able to enroll until between
No. Medi-Cal is what is known as a payer of last
resort. Medi-Cal will require you to
keep your Medicare as a condition for receiving Medi-Cal.
There are basically two kinds
of prescription drug plans available under Medicare Part D. There are stand-alone prescription drug plans
(PDPs), and Medicare Advantage prescription drug plans (MA-PDs).
Stand-alone prescription drug
plans are available for people who are enrolled in the traditional Medicare
program (Medicare Part A and Part B) or a Medicare HMO and who do not have Part
D or creditable drug coverage through their health plan.
Medicare Advantage
prescription drug plans are available for people who are enrolled in a Medicare
Advantage plan. A Medicare Advantage
plan is a Medicare managed care organization or HMO.
An individual in the
traditional Medicare program does not have to enroll in a Medicare Advantage
plan in order to get prescription drugs under Medicare. An individual in the traditional Medicare
program can enroll in a stand-alone prescription drug plan and remain in the
traditional Medicare program.
Yes. In
Nine of these plans are
available to Medicare beneficiaries who also have Medi-Cal and other low income
subsidy beneficiaries without payment of a premium. These are called “benchmark premium”
plans. These are the plans that have the
lowest premiums.
There are also a number of
Medicare HMO (Medicare Advantage) prescription drug plans (MA-PDs) that are
available as part of a beneficiary’s Medicare HMO coverage. These plans vary county-by-county just as
Medicare HMOs do. If a beneficiary is
enrolled in a Medicare HMO that offers an MA-PD plan, the beneficiary can
choose to enroll in that MA-PD plan.
These MA-PD prescription drug plans are available to Medi-Cal and other
low income subsidy beneficiaries without payment of the MA-PD premium.
The following is a list of the
nine stand-alone prescription drug plans that will enroll Medi-Cal and other
Low Income Subsidy (LIS) beneficiaries in 2007 without payment of a
premium. The list is current as of
There have been some changes
in the list since 2006. Unicare is no
longer offering a plan without payment of a premium. Individuals enrolled in the Unicare plan will
have to change to another plan, effective January 2007, in order to avoid
payment of a premium. CIGNA Health Care
has added a plan, CIGNATURE Rx Value Plan.
RxAmerica has added a plan, Advantage Star Plan by RxAmerica. WellCare has added a plan, WellCare classic.
Unicare is dividing its plan into two plans and assigning LIS beneficiaries to
the Medicare Rx Rewards Value plan.
Health Net is transferring all LIS beneficiaries to Health Net Orange
Option 1. Most confusing, United Health
Care is dividing its AARP Medicare Rx plan into two plans and is reassigning
LIS beneficiaries from its old Untied Health Rx and AARP Medicare Rx plans into
the new AARP Medicare Rx – Saver plan.
Because United has taken over PacifiCare, LIS beneficiaries in the
PacifiCare Saver Plan will also be transferred into the AARP Medicare Rx –
Saver plan. According to United, for
Medi-Cal and other LIS beneficiaries who are being reassigned into the AARP
Medicare Rx – Saver plan, all utilization management decisions and formulary
exceptions for 2006 will be grandfathered in for 2007.
|
Plan Name 2006 |
2007 Changes |
Plan Telephone Number |
Website |
|
Blue Cross – Blue Cross
MedicareRx Value |
No change |
1-866-892-5340 |
|
|
Not offered |
CIGNA Health Care –
CIGNATURE Rx Value Plan |
1-800-735-1459 |
http://www.cigna.com/health/consumer/medica
l/cignaturerx/1/7 |
|
Health Net – Health Net
|
Health Net |
1-800-935-6565 |
|
|
Humana Inc. – Humana PDP
Standard S5884-090 |
No change |
1-800-833-6578 |
|
|
PacifiCare – PacifiCare
Saver Plan |
Reassigned to United
Healthcare – AARP Medicare Rx Plan – Saver |
|
|
|
Not offered |
RxAmerica – Advantage Star
Plan by RxAmerica |
1-800-770-8014 |
|
|
Sierra Rx |
No change |
1-866-789-0565 |
|
|
Unicare – Medicare RX
Rewards |
Medicare RX Rewards Value |
1-888-892-5335 |
|
|
United Health Care – United
Health Rx |
Reassigned to United
Healthcare – AARP Medicare Rx Plan – Saver |
1888-556-7052 |
|
|
United Healthcare – AARP
Medicare Rx Plan |
United Healthcare – AARP
Medicare Rx Plan – Saver |
1-888-867-5564 |
|
|
Not offered |
WellCare – Classic |
1-888-423-5252 |
|
|
WellCare – Signature |
No change |
1-888-423-5252 |
The following are some
Medicare HMOs that offer Medicare prescription drug coverage.
|
Plan Name |
Plan Telephone Number |
Website |
|
Health Net of |
1-800-275-4737 |
|
|
Secure Horizons |
1-800-698-7505 |
|
|
Kaiser |
1-800-579-7085 |
http://prospectivemembers.kaiserpermanente.org/kpweb/medicare/entrypage.do
|
Costs will vary. Some beneficiaries will have to pay a monthly
premium. In 2007, the premium will be
about $24 per month on average. The benchmark
premium for Medi-Cal and low income subsidy beneficiaries will be around
$20. (These amounts are less than the
2006 amounts.) Medi-Cal and most other
Low Income Subsidy program beneficiaries will not have to pay the premium. (See next section for more information.)
The Medicare Part D premium
is in addition to the Medicare Part B premium, which will be $93.50 in
2007. The Medicare Part B premium is
paid directly by Medi-Cal (or deducted from your Social Security check if you
do not receive Medi-Cal). The Medicare
Part D premium can also be deducted from your Social Security check if you want. If you receive Medi-Cal, the premium will be
paid for you by the federal government as part of the low income subsidy
program. If you do not receive Medi-Cal,
you will be billed for the premium by your Part D insurance company.
Additional drugs or benefits
(or reduced deductibles/coinsurance/copayments) can be obtained from some plans
by payment of a supplemental premium.
Medi-Cal and other Low Income Subsidy beneficiaries can pay this
additional supplemental premium out-of-pocket in order to obtain the additional
drugs or benefits. The additional
benefits will vary by plan.
In addition to the Medicare
Part D premium, some beneficiaries will also have an annual deductible,
coinsurance (or copayment), and a coverage gap (donut hole). These beneficiaries will have drug coverage
with payment of an annual deductible and coinsurance (or copayments) up to an
initial coverage limit. They will then
have to pay $3,850 total out-of-pocket (including deductible and coinsurance/copayments)
before they receive catastrophic drug coverage.
Catastrophic drug coverage will pay for 95% of drug coverage.
Medi-Cal and most other Low
Income Subsidy program beneficiaries will not have to pay deductibles or
coinsurance, and will not have a coverage gap (donut hole). These beneficiaries will have to pay only
copayments of $1 to $5.35. Full benefit
Medi-Cal beneficiaries in long term care will pay nothing for covered
drugs. (See next section for a
description of the low-income subsidy, or “extra help” program.)
The Low Income Subsidy (LIS)
or Extra Help program, as it is being called, provides an additional subsidy
from the federal government for people with Medi-Cal and for other people with
limited resources, and with incomes up to 150% of the federal poverty level (
Dual eligible beneficiaries
do not have to apply for the LIS or Extra Help.
They are enrolled automatically.
Medicare beneficiaries who do not receive Medi-Cal, but who have limited
resources, and incomes up to 150% of the
The
The following people are
eligible for the low income subsidy:
Group
1
1.
All Medi-Cal beneficiaries with zero share of cost,
except 250% Working Disabled beneficiaries.
This includes SSI recipients; 1619(b); Pickle; zero share of cost DAC;
133% Aged and Disabled
2.
Full-benefit dual eligibles with incomes at or below
100% federal poverty level (
Group
2
Full-benefit
dual eligibles above 100% of
Group
3
1.
MSP (Medicare
Savings Program) dual eligibles (QMB, SLMB, QI1)
(“MSP”
is a limited benefit Medi-Cal program for people with incomes below 135% of
2.
Medicare only
beneficiaries with incomes below 135% of
Group
4
Medicare
only beneficiaries with incomes below 150% of
The following chart shows
what people who receive the low income subsidy will have to pay for their
Medicare Part D drugs in 2007:
|
|
Group 1 |
Group 2 |
Group 3 |
Group 4 |
|
Premium |
$0 (you pay nothing) |
$0 (you pay nothing) |
$0 (you pay nothing) |
Sliding scale based on
income |
|
Deductible |
$0 (you pay nothing) |
$0 (you pay nothing) |
$0 (you pay nothing) |
$53 ($50 in 2006) |
|
Coinsurance/ copayment (up to $3,600 out of
pocket) |
copay: $1.00 generic $3.10 brand $0 |
copay: $2.15 generic $5.35 brand $0 |
copay: $2.15 generic $5.35 brand |
15% coinsurance |
|
Catastrophic coverage |
$0 (you pay nothing) |
$0 (you pay nothing) |
$0 (you pay nothing) |
copay: $2.15 generic $5.35 brand |
One way is to apply for the
low income subsidy as described in the previous section. However, you can be automatically enrolled
under some circumstances. If you
incurred your share of cost at least once during the year, you will be
automatically enrolled for the remainder of the year. If you incurred your share of cost at least
once in July or later, you will be automatically enrolled for the following
year as well.
Although you will be
automatically enrolled in the low income subsidy, you will still have to enroll
in a Medicare Part D prescription drug plan.
You will have to pay the premium out of pocket for each month that you
are not enrolled in the low income subsidy.
You are eligible until your income, resources,
household size, or marital status change so that you are over the eligibility
amounts. (A Social Security cost of
living increase does not count as a change.)
You must report any changes to the Social Security Administration.
If you receive Medi-Cal with zero share of cost, there
will be no review as long as you continue to receive Medi-Cal. If you have a share of cost for Medi-Cal and
you incurred your share of cost at least once in July or later, you will be
automatically enrolled for the following year as well. If you no longer qualified for Medi-Cal in
July or later, Medicare will mail you a new application for the Low Income
Subsidy. You should reapply for the Low
Income Subsidy as soon as possible in order to be eligible next year.
If you do not receive Medi-Cal and you began receiving
the Low Income Subsidy before May, your eligibility for the following year will
not be reviewed unless there has been a change in your income, resources and
household size. You will receive a
letter from the Social Security Administration listing these amounts for the
current calendar year. If these amounts
have not increased and your marital status has not changed, you should do
nothing. You will remain eligible for
the Low Income Subsidy in the following calendar year. If any of these amounts have changed, you
should notify the Social Security Administration. You will need to return the one-page letter that came with the
notice from the Social Security Administration within 15 days. Social Security
will then mail you a form called “Social Security Administration Review of Your
Eligibility for Extra Help” (Form 1026B). If you fill out and return the form
within 30 days, any change to the amount of the Low Income Subsidy you qualify
for will be effective in January 2007 unless your marital status changed. Changes in marital status may result in
changes to the amount of the Low Income Subsidy in the following month. Some people will receive Form 1026B because
Social Security has information that there was a change in resources or
income. Return the form to Social
Security within 30 days.
The following is the standard
plan for people who do not receive Medi-Cal or Low Income Subsidy. This is the minimum federal requirement. This standard plan may be changed by the
actual Part D plans. Part D plans must
provide actuarially equivalent benefits.
Most plans do this by replacing the deductible and coinsurance with
copayments. The copayments vary
depending on which tier a particular drug is on.
|
Medicare Standard Drug Benefit – 2007 (For people who DO NOT receive Medi-Cal or
Low-Income Subsidy) |
|||
|
Drug coverage category |
If your total drug costs in calendar year 2007 are: |
Medicare drug plan pays: |
And you pay (assuming no other drug coverage): |
|
Initial benefit |
$0-265 |
$0 (Medicare pays nothing) |
Up to $265 (deductible) |
|
$265-$2,400 (initial coverage limit) |
75%, up to $1,601.25 |
plus 25%, up to $533.75 (coinsurance) |
|
|
Coverage gap (“donut hole”) |
$2,400-$5,451.25 |
$0 (Medicare pays nothing) |
plus 100%, up to $3051.25 (additional out of pocket) |
|
Total drug costs before catastrophic
coverage (Initial benefit plus
coverage gap amount) |
$5,451.25 Total |
$1,601.25 Total |
$3,850 Total (out of pocket threshold) |
|
Catastrophic coverage |
Over $5,451.25 |
95% |
Greater of: 5% or $2.15 copay/generic $5.35 copay/brand name |
You receive catastrophic
coverage only if the drugs you pay for in the coverage gap (donut hole) are
covered by the Part D drug plan. These
coverage gap costs cannot be paid for by insurance or most government
programs. They can be paid for by
family, friends, or private charities.
All medically necessary drugs
are covered unless they are excluded entirely from coverage. Excluded drugs are drugs that continue to be
covered under Medicare Part A, e.g., drugs provided in the hospital, and drugs that
continue to be covered under Medicare Part D, e.g., drugs that must ordinarily
be provided in a doctor’s office.
The following classes of
drugs are generally excluded from Medicare Part D coverage:
Barbiturates
Benzodiazepines
(diazepam [Valium], Ativan, Xanax)
Smoking
cessation
Over
the counter (nonprescription) drugs
Vitamins
Weight
drugs
Some drugs are covered
without utilization controls. This means
that if they are prescribed, they will be covered without the need for any
paperwork other than a prescription. Utilization
controls may be required for some drugs, particularly brand name drugs for
which there is a generic version or substitute.
There are a number of
utilization controls, beginning with the drug formulary. The plan’s drug formulary and most other
utilization controls are available on the plan’s website, or can be obtained by
calling the plan.
Drug Formulary. The primary
utilization control is the drug formulary.
A formulary is a list of drugs prepared by the drug plan. These drugs can be prescribed with no
paperwork other than a prescription. If
a drug is not on the formulary, or there is an additional utilization control,
more paperwork is required.
The drug plans have been
given a lot of leeway in deciding which drugs to list on their
formularies. Generally, a plan is
required to list only two or more drugs in each therapeutic class. Therefore, there can be wide variations in
what plans offer.
However, the federal
government requires all plans to list all or substantially all drugs in the
following classes:
Antidepressants
Antipsychotics
Anticonvulsants
Immunosuppressants
(transplant drugs)
Antiretrovirals
(AIDS drugs)
Antineoplastics
(Cancer drugs)
For these classes of drugs
the plans will have to provide all formulations, but may not have to provide
all dosages.
The drug plans can change
their formularies at any time. If a plan
removes a drug you are taking from the formulary, the plan must give you
60-days notice.
Tiering. A formulary
can vary the standard Medicare Prescription drug benefit by replacing the
standard deductible and co-insurance amounts with co-insurance or other cost
sharing amounts that vary with each drug.
This kind of formulary has multiple “tiers.” The copayment or other out-of-pocket cost of
the drug depends on which tier it is on.
Most plans have established formularies with tiers. On these formularies, generic drugs are
generally preferred drugs (lowest cost tier), while the brand name equivalents
are on tiers with higher copayment or cost sharing amounts. For Medi-Cal or low income subsidy
beneficiaries there will be only two tiers with $1.00/$3.10 copayments, or
$2.15/$5.35 copayments, depending on the beneficiary’s income.
Prior Authorization. If a drug is
subject to prior authorization, your doctor must first contact the plan and
show that drug is necessary to treat your condition.
Step Therapy. If a drug is
subject to a step therapy requirement, you must generally first try certain
less expensive drugs that have been proven effective for most people with your
condition.
Quantity limits. The plan may
limit you to a 30-day supply of certain drugs, or a 90-day supply for mail
order. A plan could also limit the
length of time that certain drugs can be prescribed.
Other utilization controls. Other
utilization controls include such things as substitution of one drug for
another drug that is considered by the plan to be equally effective, and
therapy management, which is a requirement that your use of the drug be
reviewed or monitored in some respect.
If the drugs you need are not
on the plan formulary (or are removed from the formulary), you or your doctor
may request an “exception” from the plan for coverage of the exact brand of
medication you require. You can also
request an exception if you need to pay a lower tier price for a higher tier
drug.
If you need an exception,
contact the plan, or have your doctor or pharmacist contact the plan. The plan may have forms that it wants you to
use to request an exception. In
addition, you can use the
Requesting an exception is
supposed to be a simple process. It can
be done over the telephone or by fax.
The
In the exception request your
doctor should indicate why the drug is medically necessary to treat your
medical condition. If your doctor has
prescribed a brand name drug when there is a generic substitute available your
doctor should indicate that other drugs have been tried and are not as effective
and explain why, or your doctor should explain why because of your medical
condition it is necessary for you to take a certain drug.
Each drug company must have a
transition plan. You can get at least a
30-day supply of drugs (90-days if you are in long-term care). The plan also has to give you notice of
formulary changes and may have to continue providing the drug without
utilization controls for the remainder of the year. Also you can request an exception in order to
obtain a non-formulary drug.
As discussed above, Medicare
Part D plans have wide leeway in deciding which drugs to cover. However there are certain drugs that are
excluded from the Medicare Part D program.
These drugs will continue to be covered under the Medi-Cal program to
the extent that they have been covered by Medi-Cal in the past.
Barbiturates
Benzodiazepines
(diazepam [Valium], Ativan, Xanax)
Smoking
cessation
Some
cough/cold
Some
prescription vitamins
Some
over-the-counter drugs
Weight
drugs
When people go to the
pharmacy they will have a Medicare Part D card and a Medi-Cal BIC card. The pharmacist should first swipe the
Medicare Part D card to see if a drug is covered under the Part D plan. The pharmacist should then swipe the BIC card
to see if the drug is one of the classes that continues to be covered under
Medi-Cal.
PLEASE NOTE: Medi-Cal will no longer cover drugs that can
be covered by Medicare Part D plans.
This is true whether or not the covered drugs are actually on the Part D
plan formulary. Therefore, people will
have to be careful to select the Part D plan that has a formulary with the
drugs they need.
For Medi-Cal beneficiaries
who do not receive Medicare, there
will no changes in Medi-Cal drug coverage, or any other aspect of Medi-Cal as a
result of Medicare Part D.
Pharmacies can waive Medicare
Part D copayments but they cannot advertise that they will do this. Pharmacies can refuse to provide the drug if
the beneficiary does not pay the copayment.
This is a change from existing Medi-Cal law which requires pharmacies to
provide drugs to beneficiaries who cannot afford to pay the copayment.
Medi-Cal will no longer pay
the Medicare HMO premium for Medi-Cal beneficiaries who are also enrolled in a
Medicare HMO. This means that Medi-Cal
beneficiaries who are in a Medicare HMO may have to pay monthly premiums for
the Medicare HMO in the future. Kaiser
Senior Advantage has agreed not to charge a premium for 2006. In 2006, Secure Horizons charged a premium
but did not disenroll beneficiaries for nonpayment.
Medi-Cal also has an
emergency drug program if there are problems obtaining Medicare Part D
coverage. Information can be found on
the California Department of Health Services Medicare Part D website: http://files.medi-cal.ca.gov/pubsdoco/pubsframe.asp?hurl=/pubsdoco/whatsnew_7050.htm.
If you are in long-term care
and you have both Medicare and Medi-Cal, you will have to enroll in a Medicare
Part D plan in order to continue drug coverage just like everyone else who has
both Medicare and Medi-Cal.
You will not have to pay a
copayment once you have been in long-term care for a full calendar month. Remember, you will keep your full income as
well until you have been in long-term care for a full calendar month, so you
will have copayments during this time.
A long-term care facility
subject to the Nursing Home Reform Act (skilled nursing facilities (SNFs) and
intermediate care facilities (ICFs), other than ICFs for the developmentally
disabled) must provide you with all medically necessary drugs whether or not
the drugs are covered by a Medicare Part D plan, or Medi-Cal. The facility cannot collect the copayment if
you cannot afford to pay it.
Contact the plan. Telephone numbers for some plans are listed
above.
If you enroll in a new plan,
you will be automatically disenrolled from any other plan. Be sure that you do not enroll from your old
plan before you enroll in the new plan.
Otherwise, you could lose coverage.
PLEASE NOTE: If you enroll in a Medicare Part D plan, you
could be disenrolled from all of your existing health insurance coverage or
HMO. If you currently have drug coverage
with your current health insurance or HMO, contact them before signing up for a
Medicare Part D plan.
If you receive Medi-Cal with
zero share of cost, you can change plans as often as once a month. If you receive Medi-Cal with a share of cost,
and you meet your share of cost at least four times during the year, you can
also change plans as often as once a month.
If you do not receive
Medi-Cal (or if you receive Medi-Cal with a share of cost, and you do not meet
your share of cost at least four times during the year) you can generally
change plans up to two times before
Contact your pharmacy after
January 1. Give the pharmacist your
Medicare Part D card, or the yellow notice you received in November telling you
which plan you are enrolled in. If you
don’t have either of these, your pharmacist will take steps to find out what
plan you are enrolled in, or to enroll you in a plan.
If you are enrolled in a Part
D plan, but do not know what plan you are enrolled in, your pharmacist can find
out that information. The pharmacist can
do one of two things:
1.
Call the Medicare
Pharmacy Line at (866) 835-7595.
2.
Submit an E1
eligibility transaction to the TrOOP facilitator. This transaction will return the phone number
of the plan to which the beneficiary has been assigned.
If you are not enrolled in a
Part D plan, the pharmacist will access a national system (operated by
Wellstone) to pay for your medications and sign you up with a Medicare Part D
plan. A detailed description of the
process that the pharmacist must follow can be found at these links: http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/Downloads/POSFacilitatedEnrollmentSummary.pdf; http://questions.cms.hhs.gov/cgi-bin/cmshhs.cfg/php/enduser/std_adp.php?p_faqid=6248.
You can change your Part D
plan up to once a month no matter how you came to be enrolled in it.
There is an appeal
procedure. You can obtain information
about the Medicare Part D appeals procedure from the Center for Medicare and
Medicaid Services (
First you should make a list
with all of the following information:
1.
The drugs you
take
2.
The formulation
(e.g. tablets, caplets, liquid, timed release)
3.
The dosage strength
(mg for each tablet)
4.
The number of
times per day that you take the drug
5.
The name and
location of your local pharmacy
The World Institute on
Disability has a useful planning tool that you can use for this purpose. It can be found at: http://www.disabilitybenefits101.org/ca/news/news_1642.htm.
Once you have made a list
with your drug and pharmacy information, you are ready to start comparing
various prescription drug plans. Here
are some questions you should ask:
1.
Are the drugs I
take covered by the plan?
2.
Does my local
pharmacy participate in the plan?
3.
If my local
pharmacy does not participate, are the drugs available by mail?
4.
Will the plan
provide the particular formulations of the drugs that I take (e.g., tablets,
caplets, liquid, timed release)?
5.
Will the plan
provide the particular dosage strengths of the drugs that I take?
6.
Are there
quantity limits for the drugs I take? If
so, is this a limit on the amount of medication I can receive at one time, or
is it a limit on the length of time I can receive the drug without my doctor
seeking additional approval?
7.
What formulary
tier is the drug on? (I.e., if I am not
a Medi-Cal or other LIS beneficiary, what will I have to pay out of pocket for
the drug?)
You should also consider
whether there are other utilization controls, for example:
1.
Is there a prior
authorization (“pre-certification”) requirement for the drugs I need?
2.
Is step therapy
required before I can take certain drugs (i.e., do I have to try a particular
drug first before I can get the drug I want?
3.
Are there
substitution requirements for the drugs I need?
4.
Are there other
utilization controls, such as therapy management, for certain drugs?
If you do not receive
Medi-Cal, or you are not a low income subsidy beneficiary, you should also
consider the following:
1.
What is the
plan’s monthly premium?
2.
What is the
plan’s annual deductible?
3.
Are my drugs on
the plan formulary?
4.
Is my local
pharmacy a preferred pharmacy? (i.e., do
the drugs at my pharmacy cost less that the drugs at other pharmacies in the
plan network?)
5.
What will the
drugs I take cost me? Are the drugs I
take preferred drugs? If not, what tier
are the drugs on and what will they cost?
6.
What will I pay
for drugs in the donut hole? (If the
drugs are covered by your plan, you will pay the same price for drugs that your
plan pays.)
7.
What is the
estimated cost of this plan for one year?
You can call the various
plans and obtain information from them.
Ask them to send you information such as a copy of their formulary and
enrollment form.
You can also use the plan
finders at www.medicare.gov. You can use the “Formulary Finder” to
determine what plans in your area cover the drugs you take. You can input the drugs you take to find out
this information. You can also use the
“Prescription Drug Plan Finder” to determine if a particular plan covers the
drugs you take. First find a plan, then
input the drugs you take. You can also
use the Formulary Finder to enroll in a plan.
More information about the
Medicare Part D program can be found in the excellent publication: “Understanding Changes in Prescription Drug Coverage
for People with Disabilities,” published by the Health Policy Institute at
Information about the
Medicare prescription drug program can be found at
www.medicare.gov. That website
includes tools for finding a Part D
plan. That website also includes the online version
of Medicare & You, the Medicare handbook, which contains general
information about Medicare, and specific information about Part D plans available
in each state. It can be found at: http://www.medicare.gov/spotlights.asp#medicare2006.
More information about
Medicare Part D is posted on www.calmedicare.org,
and on the main page and